Aug 8, 2018

Gates details Manafort's operation to funnel Ukranian money to U.S.

Rick Gates detailed Paul Manafort's operation to secretly transfer
Ukrainian money to the United States through a law firm in Cyprus and
said he used money embezzled from Manafort's firm to fund an
extramarital affair, as he testified in Manafort's fraud trial Tuesday.
Photo by Leigh Vogel/UPI | License Photo

Aug. 7 (UPI) -- Rick Gates outlined an operation in which he and Paul
Manafort used shell companies to secretly accept millions of dollars for
their work in Ukraine, during testimony Tuesday for Manafort's fraud
trial.

During his second day of testimony, Gates said Manafort used members
from a Cyprus-based law firm as ghost directors of the shell companies
through a director known as "Doctor K," who set up a series of bank
accounts in order to disguise Manafort's connection to the Ukraine, USA
Today reported.

Gates testified the law firm's bookkeepers weren't made aware of the
accounts and that he would create invoice documents to wire money to the
United States in order to to fund construction contractors, custom
tailors and other vendors for Manafort.

The typical practice involved Manafort sending a list of wire requests
to Gates and the Cyprus law firm, Gates told jurors, according to CNN.

"There were hundreds of these," he said, as prosecutors showed emails in which Manafort requested transfers.

In one such email, Manafort instructed Gates to proceed with plans to
transfer funds from one of his shell companies, Leviathan Advisors
Limited, to their consulting group, DMP International.

The law firm eventually moved the accounts to the Caribbean country of
Saint Vincent and the Grenadines, at which point Gates said Manafort
requested his name be removed from the bank account registrations. Gates
also had his name removed from some of the legal documents.

Gates also testified about financial woes he experienced in 2015, when
his DMP consulting group was without clients and was unable to secure
another political consulting contract in Ukraine.

During this period Gates said he falsified the firm's financial
statements to support mortgage loan applications and misled bankers by
submitting old home insurance policy information to make it appear
Manafort owned the property, although current policy showed a mortgage
loan.

Gates said he was aware this information was false and it was provided at Manafort's direction.

Manafort's attorney, Kevin Downing, asked Gates whether he expected the
jury to believe his testimony after acknowledging he falsified
information and embezzled money from Manafort.

As part of the cross-examination Gates also clarified testimony that he
embezzled money from Manafort's firm, which he used to pay for residence
and travel in Europe while he was engaged in an extramarital affair in
London.

Meanwhile, Manafort's former accountant, Cindy Laporta, was fired from
her firm on Tuesday after testifying last week that she helped falsify
his tax records, The Hill reported.

Her testimony "clearly represents that she failed to meet the firm's
high standards for professional and ethical conduct in her work for Mr.
Manafort," Laporta's firm Kositzka, Wicks & Co., said.

The firm also said it was "shocked" by her testimony and has begun an
investigation to ensure the actions mentioned only affected Manafort.

On Friday, Laporta testified Gates asked her to treat $2.4 million that
Manafort's consulting firm received from offshore businesses as loans on
his 2014 and 2015 tax returns and that she knew the returns weren't
accurate.
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